Portland faces loss of $6M in state aid

PORTLAND — The city would lose more than $6 million in aid under Gov. John Baldacci’s proposal to address a $438 million state budget shortfall.

Mayor Nick Mavodones and City Councilor John Anton each testified before legislative committees in Augusta in the past week in opposition to the cuts.

Anton spoke before the Appropriations and Financial Affairs and Health and Human Services committees on Monday. The committees are considering changes in funding reimbursement for general assistance that would result in a $1.3 million loss for Portland, and a savings of about $1.8 million for the state. The city is responsible for more than 40 percent of Maine’s total general assistance distributions.

“The state would save $1.8 or $1.9 million, two thirds of which would be at the expense of Portland,” said Anton, who pointed out that municipalities are required by the state to provide general assistance. Residents can apply for general assistance only after liquidating all other available resources, including retirement funds and life insurance.

“This change is being proposed at a time when the city of Portland is seeing unprecedented need among its citizens and those coming to the city in hopes of securing stable employment and accessing critical services,” Anton testified.

According to data from the city, there were more than 1,500 recipients of general assistance in Portland in 2009. In 2008, there were about 900. Those numbers do not include homeless applicants.

Mavodones on Jan. 8 testified at a joint session of the Appropriations and Taxation committees considering proposed cuts in revenue sharing. The city stands to lose about $2 million in state aid due to the governor’s proposed decrease in the revenue the state shares with municipalities and the “natural” reduction expected because of the economic downturn.

During his testimony, Mavodones said the city took proactive measures two years ago when signs of a slowing economy first showed. The city cut 110 employees – 10 percent of its workforce – and also reduced services and eliminated programs to keep the tax rate from rising.

“We implemented the massive budget cuts, layoffs, and wage and benefit freezes in an attempt to preserve essential services and insulate our citizens from property tax increases,” Mavodones testified. “But with the proposed reductions contained in the governor’s supplemental budget, we will have little choice but to increase property taxes.”

Mavodones also pointed out that the city stands to lose $2.7 million in state education aid.

Discussion and debate on the proposed budget cuts are expected to dominate this legislative session. Anton said he does not know whether testimony from city officials will result in changes to the proposed cuts.